Investment decisions are always difficult to make as it involves careful consideration of a number of factors. There are many companies offering various types of investment products. Many people do not understand all the products, many get attracted to only one feature of the product (such as high returns ) and, either ignore, or, do not adequately consider the types of risks involved.

It is true that all types of investment carry some risks ( even banks have failed in many countries )

However, provided you understand the risks, the background and performance of the people and the Company involved, you are able to maximize returns on your funds by investing in good quality investments.

Before making any decisions, there are several factors that need to be borne in mind such as:

1. What is the general nature of the Company's business ? Is the Company lending money against depreciating items such as cars, household goods etc?
2. Who are the people involved in the Company and what is their background? Are they failed business people from the past?
3. Is the Company lending to risky development or half completed projects?
4. What is the lending concentration - are the loans well spread ?
5. What is the Company's Bad Debts write-off record ?
6. What does its Arrears book look like- are there too many overdue loans ?
7. Is the Company or its subsidiaries involved in property development themselves.
   Such Companies could be using your funds to develop these properties.
8. Is the Company charging and collecting interest every month or are they capitalising (adding the interest to the loan) each month. This would affect the company's cashflow and could impact on its ability to pay you interest on your investment.
9. Am I getting a fair return on my investment?
10. How strong is the Company - one item that can be considered in this assessment is the Equity or Shareholders Funds Ratio. This ratio indicates the level of investment that the shareholders themselves have made in the Company. A high Equity Ratio indicates a higher level of commitment by the shareholders.
11. Has the Company been transparent in disclosure of information?
12. Has the Company been prompt in paying interest on investments?  

The list is not exhaustive but provides some salient points to consider to arrive at a well informed decision whether to invest in that Company.